Rock the Boat: Law, Society, and Social Justice

Category Archives: Employment Law

Unpaid internships exploit the labor of well-to-do young people, disadvantage their peers who cannot afford to work for free, replace paying entry-level jobs, and are often, but not always, illegal. Recently some of these interns have started to strike back by suing for backpay.

Last year, interns for the movie “Black Swan” sued for unpaid wages. On February 1st of this year, The New York Times reported that a former unpaid magazine intern sued Hearst Corporation for violating wage and hour laws. Both of these lawsuits alleged that the employers involved were required to pay for the particular internships at issue.

But sometimes it is legal not to pay interns. Under federal law (some states have additional requirements), unpaid internships are legal if they meet six criteria:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to training available in a school;
2. The training is for the benefit of the intern;
3. The intern does not displace regular employees, but works under their close supervision;
4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages.

In short, if an intern isn’t a bit of a burden, the employer must pay her or him. One sign that it is probably legal not to pay interns is when they receive college credit for their work.

But in many workplaces, employers are benefiting from unpaid interns’ work while everyone else involved suffers. In the “Black Swan” case, the plaintiffs claim that they did the same work as paid employees and did not receive training or advance their careers. Meanwhile they had to pay for their own room, board and expenses while Fox Searchlight Pictures exploited their free labor.

The interns weren’t the only ones who took a hit to their wallets. Uncompensated internships can contribute to unemployment. In the “Black Swan” situation, for instance, free interns did the same work as paid employees, and may have displaced people who used to do their work as a full-time job and are now unemployed.

Unpaid internships that do comply with the law harm another population: the many students and recent graduates who would benefit from the training and contacts internships can provide but who lack the resources to support themselves while working for free. Young people who already have the advantage of well-off families build on that head start with the training and foot-in-the-door that internships can provide. Once again the rich get richer, but instead of money, they accrue experience, valuable professional networks and sometimes even permanent jobs.

In February, Occupy Wall Street called on the New York Foundation for the Arts to stop advertising any and all unpaid internships. They may have the right idea. While people who worked in unpaid internships fight their former employers for back pay, this system raises a broader question: should unpaid internships be legal at all?

We’re coming up on summer, season of internships. Many students take unpaid internships for the learning experience or because they will look good on a resume, but some of them are being cheated out of the wages they should be earning.

Under a federal law called the Fair Labor Standards Act employers must pay their interns unless they meet all six of these criteria:

The training, even though it includes actual operation of the facilities of the employer, is similar to training available in a school;

The training is for the benefit of the intern;

The intern does not displace regular employees, but works under their close supervision;

The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;

The intern is not necessarily entitled to a job at the conclusion of the internship; and

The employer and the intern understand that the intern is not entitled to wages.

One good indicator that it is legal not to pay an intern is if the student is earning academic credit for her work, but that alone is not a substitute for meeting all six of the required factors.

Employers, take heed: just because you hire students for a limited time doesn’t excuse you from paying them. Note especially factor number four: interns often don’t help much and sometimes get in the way. If that isn’t true, they are entitled to (and worth) a paycheck!